Energy & Environment

America rich with energy possibilities

One of the biggest challenges for Washington policymakers who are driven by yesterday’s headlines is to formulate policies that will sufficiently address problems yet unknown and accommodate opportunities few can yet envision.

Another challenge is their tendency to revert to old battle lines when debating new issues. This is especially true in energy debates where much of the rhetoric remains unchanged from the 1970s. Forty years ago the popular mantra among intellectuals and policymakers was that the United States was an energy-producing weakling with an exhausted resource base, whose insatiable appetite for energy left it addicted to imported energy. This narrative has largely remained unchanged. Yet, America is a top tier energy producer, expanding its development of fossil fuels, and using energy more and more efficiently.    

While the nation is still dependent on imports, the energy dynamics are changing. Roger Diwan, partner and head of financial advisory at PFC Energy, stated at a recent congressional hearing: "We believe that by 2020, the United States will become the largest producer of hydrocarbons in the world, surpassing Russia.” So, while the forecast of U.S. ascendency can be debated, that we are witnessing a rapid and dramatic shift in the energy equation is not disputable. Neither is the impacts of increased domestic production on the nation’s economy will be significant.

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Rising gas prices due to 'commodity gamblers'

Here we are again. Gas prices are on the rise and citizens want to know why. They feel in their gut that the system is rigged. And in fact, they are right.

The cost of gas is not going up because of decreased supply. The world oil supply rose by 1.3 million barrels per day in the last quarter of 2011.

The cost of gas is not going up because of increased demand in America. Demand for oil in America is at an 11-year low.

So what is going on? The answer in short is that the futures market for oil is being operated like a casino.

Let me explain.

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Climate control: A moral issue

It is the winter of 2012, but it feels like spring. And our gut tells us that that is not a good thing.

But before we get up the courage to link this lovely, but eerie, weather to the steady warnings coming from climate scientists – who’ve been telling us for decades about the dire consequences of climate change if we continue our unbridled use of fossil fuels - Senator Inhofe looks to provide the mind- and heart-numbing relief he believes we long for in the form of a misguided book. 

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Obama's misguided energy policy

Despite his recent spin about presiding over an increase in domestic production, since the beginning of his Administration, President Obama has worked to sabotage American energy development. As a result of restricting access to domestic resources and implementing restrictive regulations which hike energy costs, American families are suffering.

With gasoline near $4 per gallon around the country, the President is under increasing political pressure from the left to release oil from the Strategic Petroleum Reserve (SPR). However, lowering gas prices requires a sensible, long term solution, not a one-time short-term fix. Dumping our emergency reserve into the market with a moment’s notice will only make a bad situation worse.

Tapping the SPR in this environment won’t have a meaningful impact on gasoline prices. Last summer, when President Obama released oil from the SPR, prices rose again the next week. A one-time infusion won’t fool OPEC nations into believing that America can manage world oil prices. A unilateral draw on our own reserve would do little to affect world price because other producing nations, especially OPEC, would simply reduce production to offset our meager addition.

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Big squeeze at the pump hurts middle class

Pain at the pump is tangible. It hits all Americans every time they fill their gas tanks. What they may not realize though is the same White House policies that make gas prices higher also stymie job-creation.   

A number of factors, beyond the reach of government, contribute to high gas prices, including global demand and Persian Gulf instability. However, it's the variables the federal government does control where the Obama administration's energy policies (and attitudes toward natural resources in general) not only fail, but do real harm to middle and working-class communities.

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Standing up for the Farm Bill

One might wonder why two heads of Jewish organizations are writing about the Farm Bill. After all, most American Jews do not live on farms.  But this legislation touches almost every aspect of our food system and is as important to communities in New York and Miami as it is to those in Lincoln and Dubuque. In ancient times, our ancestors were commanded to leave the gleanings of their fields for the poor and the stranger. Today, we have an obligation to step up to the plate and make a difference in the debate over our national food and agriculture policies.

In an effort to achieve our values-inspired vision of food justice, American Jewish World Service and the Jewish Council for Public Affairs have come together with four other national Jewish organizations – the Coalition on the Environment and Jewish Life, Hazon, MAZON: A Jewish Response to Hunger, and the Union for Reform Judaism - to form the Jewish Farm Bill Working Group. These organizations are joined by several others in endorsing a statement of principles called the “Jewish Platform for a Just Farm Bill.” 

We are united in the belief that as people of faith we cannot stand idly by when millions go hungry at home and abroad. The link between food and faith obligates our community to challenge the injustice of hunger, to champion the rights of all for nutritious food, and to steward the land on which our sustenance depends.The reauthorization of the Farm Bill is an opportunity to put these principles into practice.

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America's IMBY era for energy

Last week during a speech at the University of Miami, President Obama called for an “all-of-the-above energy strategy that develops every available source of American energy.” The plea in itself was far from surprising – the president himself made it during his most recent State of the Union address and members of both houses of Congress have been citing a variant of this for some time now as a way for the country to finally take control of its energy future.
 
The surprising part was that this message came from a president who has done so much to hamstring U.S. energy development. Take the development of natural gas, which the president used as evidence that “we don’t have to choose between our environment and our economy.” U.S.-based innovation has opened vast reserves of shale gas deposits. More than 200,000 jobs have been created over the last several years as part of efforts to extract natural gas from massive shale formations.

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Comprehensive approach is the only way to control gas prices

With gas prices climbing and many experts predicting that U.S. gas prices will peak as high as five dollars a gallon this summer, public voices are rising as well, asking how we can bring prices down and avoid straining our still-recovering economy. Still, with so many factors impacting the price we see at the pump, our focus must go beyond any short-term fix, and focus on how we can finally relieve ourselves of the ongoing burden of our nation’s petroleum addiction.

We know that gasoline prices are cyclical, typically increasing during the summer; it was in the summer of 2008 that we saw our previous average high price for gas, at $4.11 a gallon.

However, this summer’s prices also reflect - once again - ongoing tensions in the Middle East. While sanctions against Iran have slightly reduced oil supplies, more general fears of how tensions in the region will affect future oil shipments are having a greater impact on oil prices overall. With one fifth of the world’s oil supply transiting the Strait of Hormuz - a flow of roughly 17 million barrels a day - Iranian threats to blockade the Strait, along with fears of the effects of an Israeli attack on Iran, are leading to efforts to stockpile crude, driving up prices.

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Fiddlers, foreign oil and failed policy

One-fifth of the world's oil supply travels through the vital Strait of Hormuz in the Middle East.

Iran recently threatened to blockade the Strait and choke off crude oil shipments from Middle East suppliers. Punctuated with a 10-day naval exercise, Iran clearly intends to hamper, obfuscate and pester the West and its Arab allies even if not actually able to sever this vital artery of the world's economy.

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Leaving behind the age of oil

Those that tell you that we can drill our way to $2-a-gallon gas are selling fool’s gold.
 
Nationwide, our gas use has consistently gone down over the past couple of years. At the same time, our domestic production is at the highest level it has been in eight years, with the number of rigs in U.S. oil fields quadrupling in the past three years alone. It has even gotten to the point where American refineries have begun to export their fuel abroad - in 2010, we exported 2.3 million barrels of crude oil a day - and our use of foreign oil is at a 16-year low. If the drilling proponents are correct, then our gas prices should be at their lowest. But, with some analysts predicting that gas prices will hit $5 a gallon this summer, this clearly is not the case.

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